Reconciliation Australia Limited

Transcription

1 Reconciliation Australia Limited ABN Annual Financial Report For the year ended 30 June 2017

2 Contents to financial report Page no. Directors report 3 Auditors declaration of independence 8 Directors declaration 9 Consolidated statement of profit or loss and other comprehensive income 10 Consolidated statement of financial position 11 Consolidated statement of changes in equity 12 Consolidated statement of cash flows 13 Notes to the financial statements 14 Independent auditors report 29 2

3 Directors report Your directors present this report to the members of Reconciliation Australia Limited (Reconciliation Australia) for the year ended 30 June Directors The names of each person who has been a director during the year and to the date of this report are: Name Professor Thomas E. Calma AO (Co Chair) Hon DLitt, Hon DSc, Hon DUniv Ms Melinda A. Cilento (Co Chair) BA, BEc (Hons), MEc Mr Kenny R. Bedford BAppHSc, DipYW Mr Jason C. Glanville Dr Ken R. Henry AC FASSA BCom (Hons), PhD, DB h.c Mr Glen A. Kelly BEnvSc, MAICD Particulars Professor Calma is an Aboriginal elder from the Kungarakan tribal group and a member of the Iwaidja tribal group in the NT. He is currently the Chancellor of the University of Canberra and the National Coordinator for Tackling Indigenous Smoking. Professor Calma holds a number of board positions with Ninti One, the Australian Indigenous Leadership Centre and the Australia Literacy and Numeracy Foundation. He previously served as the Aboriginal and Torres Strait Islander Social Justice Commissioner and the Race Discrimination Commissioner. Ms Cilento is CEO of the Committee for Economic Development of Australia (CEDA) and a non-executive director with Woodside Petroleum and Australian Unity. She previously held senior management and economist roles at the Productivity Commission, Business Council of Australia, International Monetary Fund and the Commonwealth Department of Treasury. Mr Bedford lives on the remote island of Erub (Darnley) and until recently was on the board of the Torres Strait Regional Authority. He is Manager of Culture and Diversity at My Pathway, President of the Eurb Fisheries Management Association and a director of Debe Mekik Le Consultancy. Mr Bedford was a convener at the recent Referendum Council dialogues and is a member of the Uluru Statement Working Group. A member of the Wiradjuri peoples from south-western New South Wales, Mr Glanville is currently the Program Director for the Atlantic Fellows for Social Equity. He was the inaugural CEO of the National Centre of Indigenous Excellence and holds board positions with the Australian Indigenous Governance Institute, National Australia Day Council, Carriageworks and the Australian Indigenous Leadership Centre. Mr Glanville resigned from the Board on 29 August Dr Henry is the Chairman and a non-executive director of National Australia Bank Ltd and a non-executive director of the Australian Stock Exchange. He is also Chairman of the Sir Ronald Wilson Foundation and Governor of the Committee of Economic Development of Australia (CEDA) and Director of the Cape York Partnership. For a decade commencing in 2001 Dr Henry was Secretary to the Treasury, a member of the Board of the Reserve Bank of Australia and a member of the Board of Taxation. Dr Henry resigned from the Board on 14 September Mr Kelly is a Noongar man and is currently a Director at KPMG Arilla Indigenous Services. From 2006 to 2015 he served as CEO of the South West Aboriginal Land and Sea Council where he was the chief negotiator of the Noongar Native Title Settlement. Mr Kelly is also a director of the Museum of Freedom and Tolerance WA and a member of the Murdoch University Senate. 3

4 Name Mr Bill D. Lawson AM BEng Ms Djapirri Mununggirritj Mr Peter S. Nash BComm, CA Ms Kirstie M. Parker Ms Joy Thomas Particulars Mr Lawson is a Director of the Reconciliation Council of Tasmania and a retired engineer, most recently working as a Principal at Sinclair Knight Merz. From 2011 to 2012 Mr Lawson was the Tasmanian representative on the Prime Minister s Expert Panel for the Recognition of Indigenous Australians. He is also the founder of the Beacon Foundation. A Yolgnu elder from North East Arnhem, Ms Mununggirritj is currently an Indigenous Liaison Officer with the Department of Prime Minister and Cabinet. She is member of the board of Miwatj Aboriginal Health, Gumatj Aboriginal Corporation and the Dhumurru Land Management Aboriginal Corporation. Ms Mununggirritj is also heavily involved in the Yothu Yindi Foundation including the Garma Festival. A Chartered Accountant with over 30 years experience, Mr Nash was most recently the Australian Chairman of KPMG, where he held positions on KPMG s Global and Asia Pacific boards. Mr Nash is also a board member of the Koorie Heritage Trust, Golf Victoria and the Migration Council of Australia. A Yuwallarai woman from northwest NSW, Ms Parker is currently Director of Aboriginal Affairs and Reconciliation with the Department of State Development (SA). She was previously the the CEO of the National Centre of Indigenous Excellence and Co-Chair of the National Congress of Australia s First Peoples. Ms Parker has over 25 years experience in journalism and the management of Indigenous organisations, including as the Editor of the Koori Mail. Ms Thomas comes from a background in federal politics, serving for many years as an adviser and chief of staff to Ministers in the Howard Government. She previously held senior management positions with the Australian Medicare Local Alliance (AML Alliance) and Australian General Practice Network (AGPN). Ms Thomas works as a private consultant to peak industry bodies and the primary health care sector. The above named directors held office during the whole of the financial year and since the end of the financial year except for: Mr Jason C. Glanville who resigned from the Board on 29 August 2016; and Mr Ken R. Henry who resigned from the Board on 14 September Company secretary Ms Karen Mundine (Chief Executive Officer) was appointed as Company Secretary on 18 September She is from the Bundjalung Nation of northern NSW and has more than 20 years experience leading community engagement, public advocacy, communications and social marketing campaigns. Ms Mundine holds a Bachelor of Arts in Communications and is a Director of Gondwana Choirs and the Australian Indigenous Leadership Centre. Mr Justin Mohamed held the position of Company Secretary from 1 November 2014 to 17 September He is a Gooreng Gooreng man from Bundaberg in Queensland and was previously the Chairperson of the National Aboriginal Community Controlled Health Organisation (NACCHO), after working with Victorian Aboriginal communities for twenty years. Mr Mohamed holds an Advanced Diploma of Business Management and a Certificate IV in Managing Social and Community Services. 4

5 Short and long term objectives and strategy Reconciliation Australia is the lead body for reconciliation in the nation. The Company is an independent, not-for-profit organisation that promotes and facilitates reconciliation by building relationships, respect and trust between the wider Australian community and Aboriginal and Torres Strait Islander peoples. Our purpose is to inspire and enable all Australians to contribute to the reconciliation of our nation. Our vision of a just, equitable and reconciled Australia and is based on five inter-related dimensions: race relations, equality and equity, unity, institutional integrity and historical acceptance. These five dimensions do not exist in isolation; they are inter-related and Australia can only achieve full reconciliation if we progress all five. Principal activities During the year, Reconciliation Australia was involved in a range of programs and projects aimed at connecting people and promoting a greater understanding of Australia s First Nations histories, cultures, identities and successes. This includes: Reconciliation Action Plan (RAP) program Indigenous Governance Awards Constitutional recognition of our nation s First Peoples (Recognise Campaign) Narragunnawali: Reconciliation in Schools and Early Learning National Reconciliation Week Australian Reconciliation Barometer Review of operations The result of Reconciliation Australia s consolidated operations in the current year was a surplus of 271,245 (surplus of 236,990 in 2016). Reconciliation Australia s general operational activities and the constitutional recognition (Recognise) campaign were primarily funded by the Commonwealth Government, through the Department of Prime Minister and Cabinet. Funding was also received from BHP, corporate supporters and private donors. Changes in the state of affairs On 19 June 2017 the directors resolved to windup and dissolve the Reconciliation Australia Fund effective 30 June From 1 July 2017 the Public Fund required under Reconciliation Australia s deductable gift recipient (DGR) status is being maintained directly within Reconciliation Australia Limited. There were no other significant changes in the state of affairs of Reconciliation Australia during the financial year. Subsequent events after the balance date Mr Justin Mohamed, Chief Executive Officer since November 2014 concluded his role with Reconciliation Australia on 28 July Ms Karen Mundine was appointed as the new Chief Executive Officer from 29 July Ms Mundine has been with the organisation since 2008, most recently as Deputy Chief Executive Officer. On 11 July 2017, the BHP Foundation announced that it would be entering into a five year, 11m grant agreement with Reconciliation Australia for the Narragunnawali and Indigenous Governance Programs. The grant agreement is due to commence in November On 11 August 2017 it was announced that the Recognise campaign would be ceasing operations by 30 September 2017, due to the conclusion of Federal Government funding for this project. 5

6 On 13 September 2017 The Myer Foundation requested that given the conclusion of the Recognise campaign on 30 September 2017, Reconciliation Australia should formally reapply to the Foundation to use the unspent portion of the funding the Foundation had provided for the Recognise regional field campaign. The balance of this unspent funding is included in the Revenue Received in Advance account and amounted to 445,605 at 30 June 2017, and the date of this report. There have been no other significant events occurring after balance date which may affect either the operations of Reconciliation Australia, or the results of those operations or the state of affairs of the organisation. Environmental regulation and performance Reconciliation Australia is not subject to any particular or significant environmental regulation. Indemnification of officers and auditors During the financial year, Reconciliation Australia paid a premium in respect of a contract insuring the directors of Reconciliation Australia (as named above), the company secretary, the Chief Executive Officer and all executive officers of Reconciliation Australia against a liability incurred as such a director, secretary or executive officer to the extent permitted by the Corporations Act The contract of insurance prohibits disclosure of the nature of the amount of the premium. Reconciliation Australia has not otherwise, during or since the end of the financial year, except to the extent permitted by law, indemnified or agreed to indemnify an officer or auditor of Reconciliation Australia against a liability incurred as such an officer or auditor. Directors meetings The following table sets out the number of directors meetings (including meetings of committees of directors) held during the financial year and the number of meetings attended by each director (while they were a director or committee member). During the financial year four board meetings and five audit and risk committee meetings were held. Director Board of directors Audit and risk committee Held Attended Held Attended Prof. T. E. Calma AO Ms M. A. Cilento Mr K. R. Bedford Mr J. C. Glanville Dr K. R. Henry AC Mr G. A Kelly Mr W. D. Lawson AM Ms D. Mununggirritj Mr P. S. Nash Ms K. M. Parker Ms J. Thomas

7 Members guarantee In accordance with Reconciliation Australia s constitution, each member is liable to contribute 1 in the event that the company is wound up. The total amount members would contribute is 9. Auditor s independence declaration The auditor s independence declaration is included on page 8 of this financial report. The directors report is signed in accordance with a resolution of directors. On behalf of the directors: Ms Melinda Ann Cilento Director Professor Thomas Edwin Calma AO Director 20 October

8 Deloitte Touche Tohmatsu ABN Level 2 8 Brindabella Circuit Brindabella Business Park ACT 2609 GPO Box 823 Canberra ACT 2601 Australia The Board of Directors Reconciliation Australia Limited Old Parliament House King George Terrace Parkes ACT 2600 DX 10307SSE Tel: +61 (0) Fax: +61 (0) October 2017 Dear Directors Reconciliation Australia Limited In accordance with Subdivision 60-C of the Australian Charities and Not-for-profits Commission Act 2012, I am pleased to provide the following declaration of independence to the directors of Reconciliation Australia Limited. As lead audit partner for the audit of the financial statements of Reconciliation Australia Limited for the financial year ended 30 June 2017, I declare that to the best of my knowledge and belief, there have been no contraventions of: (i) the auditor independence requirements as set out in the Australian Charities and Not-for-profits Commission Act 2012 in relation to the audit; and (ii) any applicable code of professional conduct in relation to the audit. Yours sincerely DELOITTE TOUCHE TOHMATSU David Salmon Partner Chartered Accountants Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Touche Tohmatsu Limited.

9 Directors declaration The directors declare that: (a) in the directors opinion, there are reasonable grounds to believe that Reconciliation Australia will be able to pay its debts as and when they become due and payable; and (b) in the directors opinion, the attached financial statements and notes there to, are in accordance with the Australian Charities and Not-for-profits Commission Act 2012, including compliance with accounting standards and giving a true and fair view of the financial position and performance of the company and consolidated entity. Signed in accordance with a resolution of the directors made pursuant to s of the Australian Charities and Not-for-profits Commission Regulation On behalf of the directors: Ms Melinda Ann Cilento Director Professor Thomas Edwin Calma AO Director 20 October

10 Consolidated statement of profit or loss and other comprehensive income for the year ended 30 June 2017 Note Revenue 3(a) 13,772,008 10,885,826 Employee benefits expense (6,283,527) (5,645,332) Consultants and outside services expense (363,793) (425,267) Communications and marketing expense (4,460,461) (2,624,771) Workshops and events expense (920,627) (445,290) Travel and accommodation expense (840,786) (733,393) Office communications and supplies expense (156,915) (176,342) Office facilities and utilities expense (389,274) (463,425) Depreciation and amortisation expense 3(b) (82,430) (128,502) Other expenses (2,950) (6,514) Surplus before tax 271, ,990 Income tax expense Surplus for the year from continuing operations 271, ,990 Other comprehensive income for the year - - Total comprehensive income for the year 271, ,990 This statement of profit or loss and other comprehensive income is to read in conjunction with the attached notes. 10

11 Consolidated statement of financial position as at 30 June 2017 Note Assets Current assets Cash and cash equivalents 1,630,505 1,413,490 Investments 5 6,034,176 10,704,587 Trade and other receivables 6 426, ,348 Other assets 7 93, ,585 Total current assets 8,184,946 12,690,010 Non current assets Property, plant and equipment 8 120, ,077 Total non current assets 120, ,077 Total assets 8,305,014 12,905,087 Liabilities Current liabilities Trade and other payables 9 1,178,537 1,483,354 Provisions , ,043 Revenue received in advance 11 4,266,178 8,835,591 Total current liabilities 5,713,195 10,605,988 Non current liabilities Provisions , ,371 Total non current liabilities 233, ,371 Total liabilities 5,947,041 10,818,359 Net assets 2,357,973 2,086,728 Equity Capital and reserves Retained earnings 12 1,735,862 1,586,702 Reserves , ,026 Total equity 2,357,973 2,086,728 This statement of financial position is to read in conjunction with the attached notes. 11

12 Consolidated statement of changes in equity for the year ended 30 June 2017 Note Constitutional Recognition Reserve Retained earnings Total Balance at 30 June ,371 1,386,368 1,849,739 Surplus for the year - 236, ,990 Other comprehensive income for the year Total comprehensive income for the year - 236, ,990 Transferred to reserve 13(a) 36,656 (36,656) - Balance at 30 June ,026 1,586,702 2,086,728 Surplus for the year - 271, ,245 Other comprehensive income for the year Total comprehensive income for the year - 271, ,245 Transferred to reserve 13(a) 122,085 (122,085) - Balance at 30 June ,111 1,735,862 2,357,973 This statement of changes in equity is to read in conjunction with the attached notes. 12

13 Consolidated statement of cash flows for the year ended 30 June 2017 Note Cash flow from operating activities Receipts from sponsors 217, ,680 Project funding received 4,195,032 7,349,642 Government grants received 3,885,885 3,243,253 Proceeds from donations and fundraising appeals 860, ,048 Payments to suppliers and employees (11,492,802) (11,628,474) Net GST and employee taxes paid (2,308,397) (2,010,306) Net cash (used in) in operating activities 4 (4,641,919) (2,621,157) Cash flow from investing activities Interest received 205, ,080 Proceeds from / (purchase of) investments 4,670,411 (174,935) Purchase of property, plant and equipment (16,803) (59,057) Net cash (used in) / generated by investing activities 4,858,934 (24,912) Net (decrease) / increase in cash and cash equivalents 217,015 (2,646,069) Cash and cash equivalents at the beginning of the year 1,413,490 4,059,559 Cash and cash equivalents at the end of the year 1,630,505 1,413,490 This statement of cash flows is to read in conjunction with the attached notes. 13

14 Notes to the financial statements for the year ended 30 June Corporate information The consolidated financial statements of Reconciliation Australia Limited (the Company) for the year ended 30 June 2017 were authorised for issue in accordance with a resolution of the directors on 17 October Reconciliation Australia is a company limited by guarantee, incorporated and domiciled in Australia. 2. Application of new and revised accounting standards 2.1 Amendments to AASBs and the new Interpretation that are mandatorily effective for the current year The Group has adopted all of the new and revised standards and interpretations issued by the Australia Accounting Standards board (the AASB) that are relevant to their operations and effective for an accounting period that begins on or after 1 July New and revised standards and amendments thereof and interpretations that are relevant to the Group include: AASB 1057 Application of Australia Accounting Standards and AASB Amendments to Australia Accounting Standards Scope and Application Paragraphs. AASB Amendments to Australia Accounting Standards Clarification of Acceptable Methods of Deprecations and Amortisation. AASB : Amendments to Australia Accounting Standards Annual Improvements to Australian Accounting Standards Cycle. AASB Amendments to Australian Accounting Standards Disclosure Initiative: Amendments to AASB 101 Impact of the application of AASB 1057 Application of Australia Accounting Standards and AASB Amendments to Australia Accounting Standards Scope and Application Paragraphs The Group has applied these amendments for the first time in the current year. The amendments effectively move Australian specific application paragraphs from each standard into a combined standard. The application of these amendments has no impact on the Group s consolidated financial statements. Impact of the application of AASB Amendments to Accounting Standards Clarification of Acceptable Methods of Depreciation and Amortisation The Group has applied these amendments for the first time in the current year. The amendments to AASB 116 Property, Plant and Equipment prohibit entities from using a revenue based depreciation methods for items of property, plant and equipment. As the Group already uses the diminishing value and straight line method for depreciation and amortisation for its property, plant and equipment, the application of these amendments has no impact on the Group s consolidated financial statements. 14

15 2. Application of new and revised accounting standards (continued) Impact of the application of AASB : Amendments to Australia Accounting Standards Annual Improvements to Australian Accounting Standards Cycle The Group has applied these amendments for the first time in the current year. Relevant amendments include additional application guidance on AASB 7: Financial Instruments: Disclosure including the concept of continuing involvement for the purposes of disclosures required by the standard, and the removal of the requirement to provide disclosure relating to offsetting financial assets and financial liability in interim financial reports. The application of these amendments has no impact on the Group s consolidated financial statements. Impact of the application of AASB Amendments to Australian Accounting Standards Disclosure Initiative: Amendments to AASB 101 The Group has applied these amendments for the first time in the current year. The amendments clarify that an entity need not provide a specific disclosure requirement by an AASB if the information resulting from the disclosure is not material, and give guidance on the bases of aggregating and disaggregating information for disclosure purposes when compliance with the specific requirements in AASB is insufficient to enable users of financial statements to understand the impact of particular transactions, events and conditions on the entity s financial position and financial performance. The amendments also provide examples of systematic ordering or grouping of the notes. The application of these amendments has not had a material presentation impact on the financial performance or financial position of the Group. 2.2 Statement of compliance These financial statements are general purpose financial statements have been prepared in accordance with the requirements of the Australian Charities and Not-for-profits Commission Act 2012, Australian Accounting Standards Reduced Disclosure Requirements, and comply with other requirements of the law. The financial statements comprise the consolidated financial statements of the group. For the purpose of preparing the consolidated financial statements, the Company is a not-for-profit entity. 2.3 Basis of preparation These consolidated financial statements have been prepared on the basis of historical cost, except for certain non-current assets and financial instruments that are measured at revalued amounts or fair values, as explained in the accounting policies below. Historical cost is generally based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value measurement and/or disclosure purposes in these consolidated financial statements is determined on such a basis, except for leasing transactions that are within the scope of AASB 117: Leases, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in AASB 102: Inventories or value in use in AASB 136: Impairment of Assets. 15

16 2.3 Basis of preparation (continued) In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. Level 2 inputs are inputs, other than quoted prices including within Level 1, that are observable for the asset or liability, either directly or indirectly; and Level 3 inputs are observable inputs for the asset or liability. 2.4 Basis of consolidation The consolidated financial statements incorporate the financial statements of the Company and entities (including special purpose entities) controlled by the Company. Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the group. All intra-group transactions, balances, income and expenses are eliminated in full on consolidation. 2.5 Significant accounting policies The following significant accounting policies have been adopted in the preparation and presentation of the financial report: Cash and cash equivalents Cash and cash equivalents comprise cash on hand and cash in bank. Investments Investments comprise of short-term bank deposits and are measured at amortised cost using the effective interest method less any impairment. Financial assets Investments are measured on the cost basis which is considered to be at fair value. As fair value assets any resultant gain or loss is recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset. Trade receivables and other receivables are measured at amortised cost using the effective interest rate method, less any impairment Financial liabilities Trade and other payables are initially measured at fair value, net of transaction costs. Trade and other payables are subsequently measured at amortised costs using the effective interest rate method, with interest expense recognised on an effective yield basis. The effective interest rate method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts future cash payments through the expected life of the financial liability, or where appropriate, a shorter period. 16

17 2.5 Significant accounting policies (continued) Employee benefits Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave, and long service leave when it is probable that settlement will be required and they are capable of being measured reliably. Provision made in respect of employee benefits expected to be settled within twelve months are measured at their nominal amounts using the remuneration rate expected to apply at the time of settlement. Provisions made in respect of employee benefits that are not expected to be settled within twelve months are measured as the present value of the estimated future cash outflows to be made in respect of services provided by employees up to the reporting date. Goods and services tax Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except: where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item or expense; or for receivables and payables which are recognised inclusive of GST. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables. Cash flows are included in the Statement of Cash Flows on a net basis. The GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority, is classified as operating cash flows. Impairment of assets At each reporting date the Company reviews the carrying amounts of its assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Recoverable amount is the higher of fair value less costs to sell and depreciated replacement cost. If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash generating unit) is reduced to its recoverable amount. An impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which the impairment loss is treated as a revaluation decrease (refer Property, plant and equipment). Where an impairment loss subsequently reverses, the carrying amount of the asset (cash generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash generating unit) in prior years. A reversal of an impairment loss is recognised in profit and loss immediately, unless the relevant asset is carried at fair value, in which case the reversal of the impairment loss is treated as a revaluation increase (refer Property, plant and equipment). 17

18 2.5 Significant accounting policies (continued) Income tax The Company is a charitable institution and has been endorsed by the Australian Taxation Office to access income tax exemptions under Subdivision 50-B of the Income Tax Assessment Act This endorsement applies from 1 July 2000 and there have been no changes to the Company s status to warrant a change to this endorsement. In-kind contributions From time to time Reconciliation Australia receives donated services and facilities. These contributions are not considered to be material and are not recognised in the financial report as the related transaction would be recorded as revenue and disbursement in the same financial year and therefore has no effect on the results of the Company. Leased assets Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the lease asset are consumed. Property, plant and equipment Plant and equipment are stated at cost less accumulated depreciation and impairment (except artwork). Cost includes expenditure that is directly attributable to the acquisition of the item. In the event that settlement of all or part of the purchase consideration is deferred, cost is determined by discounting the amounts payable in the future to their present value as at the date of acquisition. Depreciation is provided on property, plant and equipment (except artwork). Depreciation is calculated on a diminishing balance method so as to write off the net cost or other revalued amount of each asset over its expected useful life to its estimated residual value. The following estimated useful lives are used in the calculation of depreciation: Furniture and fitting 5 to 20 years Office equipment 3 to 10 years IT equipment 2 to 4 years Leasehold improvements 2 to 3 years Artwork is stated at cost and is not depreciated. The cost of the artwork approximates the fair value of this asset. There have been no changes to the estimated useful lives of property, plant and equipment since the prior year. Provisions Provisions are recognised when the Company has a present obligation, the future sacrifice of economic benefits is probable and the amount of the provision can be measured reliably. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that recovery will be received and the amount of the receivable can be measured reliably. 18

19 2.5 Significant accounting policies (continued) Revenue recognition The Company receives funding by way of grants and sponsorships for specific projects. Funding received in one year may be expected to fund the costs of that project over the course of more than one financial year. Revenues are recognised in a financial year to the extent of the relevant project s outlay in that period. Funds to be spent in future periods are provided for as revenue received in advance. In addition, the Company receives funding in the form of government grants for the purpose of general reconciliation activities. Reconciliation Australia recognises this grant funding over the course of the term within the Commonwealth Deed of Grant. In this respect, the Board will be recognising revenue to the extent of eligible expenditure incurred in each financial year. All other revenue including registration fees, donations and interest are recognised when the right to receive the income has been established. Comparative figures Where required by accounting standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. 19

20 Note Surplus from operations (a) Revenue Government grants 3,725,000 3,525,000 Project funding 8,777,341 6,727,019 Charitable donations 383, ,049 Proceeds from fundraising appeals 529,514 - Interest income 189, ,453 Other revenue 167, ,305 Total revenue 13,772,008 10,885,826 (b) Surplus before income tax Surplus before tax has been arrived at after charging the following losses: Loss from disposal of property, plant and equipment and intangible assets 25, Surplus before tax has been arrived at after charging the following expenses: Depreciation and amortisation expense: - Furniture and fittings 2,795 4,725 - Office equipment 6,076 11,195 - IT equipment 32,687 37,707 - Leasehold improvements 40,872 74,875 Total depreciation and amortisation expense 82, ,502 Post employment benefits: - Defined contribution plans 511, ,763 Charitable donations administrative costs 5,443 7,461 20

21 Cash and cash equivalents Reconciliation of profit for the year to net cash flows from operating activities Cash flows from operating activities Profit for the year 271, ,990 Interest income recognised in profit and loss (189,041) (210,453) Depreciation and amortisation of non current assets 57, ,502 Loss on disposal of property, plant and equipment 25, Writeback of make good provision not required 29,589 - Movements in working capital: (Increase) / decrease in trade receivables (1,537) 274,501 (Increase) / decrease in other financial assets 36,920 (28,638) Increase / (decrease) in trade and other payables (304,817) (3,273,053) Increase / (decrease) in provisions 2,912 57,358 Increase / (decrease) in revenue received in advance (4,569,413) 7,046,330 Cash flow (used in) operating activities (4,641,919) (2,621,157) 5. Investments Bank term deposits 6,034,176 10,704,587 Total investments 6,034,176 10,704,587 Bank term deposits earn interest at market rates. The average interest rate for the year was 2.26% (2016: 2.56%). 6. Trade and other receivables Trade receivables 52, ,605 Other receivables 373, ,743 Total trade and other receivables 426, ,348 The average credit period on trade receivables is 14 days. No interest is charged on trade and other receivables. 21

22 Note Other assets Prepayments 75,665 72,585 Bonds 18,000 58,000 Total other assets 93, , Property, plant and equipment Furniture and fittings Artwork Office equipment IT equipment Leasehold improvements Total Carrying amounts Balance at the beginning of the year 34,550 5,026 20,249 98,155 57, ,077 Balance at the end of the year 28,000 5,026 9,207 63,829 14, ,068 Cost or valuation Balance at 1 July ,159 5,026 69, , , ,855 Additions - - 1,922 12,808 2,073 16,803 Disposals (13,541) - (35,570) (95,239) (89,735) (234,085) Balance at 30 June ,618 5,026 35, , , ,572 Accumulated depreciation Balance at 1 July 2016 (30,609) - (48,781) (165,690) (140,697) (385,777) Charge for the year (2,795) - (6,076) (32,687) (40,872) (82,430) Disposals 9,786-28,682 80,792 85, ,703 Balance at 30 June 2017 (23,618) - (26,175) (117,585) (96,126) (263,504) Carrying amounts Balance 1 July ,594 5,026 27,554 87, , ,272 Balance at 30 June ,550 5,026 20,249 98,155 57, ,077 Cost or valuation Balance at 1 July ,584 5,026 65, , , ,653 Additions 4,431-3,890 48,818 1,918 59,057 Disposals (855) (855) Balance at 30 June ,160 5,026 69, , , ,855 Accumulated depreciation Balance at 1 July 2015 (25,990) - (37,586) (127,983) (65,822) (257,381) Charge for the year (4,725) - (11,195) (37,707) (74,875) (128,502) Disposals Balance at 30 June 2016 (30,610) - (48,781) (165,690) (140,697) (385,778) 22

23 Note Trade and other payables Trade payables 606, ,914 Other payables 572,275 1,020,440 Total trade and other payables 1,178,537 1,483,354 No interest was charged on trade or other creditors. 10. Provisions Employee entitlements current 268, ,454 Employee entitlements non current 180, ,323 Make good (leasehold office premises) - current - 29,589 Make good (leasehold office premises) non current 53,467 53,048 Total provisions 502, , Revenue received in advance Project funding and government grants received in advance 4,266,178 8,835,591 Total revenue received in advance 4,266,178 8,835, Retained earnings Balance at beginning of the year 1,586,702 1,386,368 Total comprehensive income for the year 271, ,990 Total available for appropriation 1,857,947 1,623,358 Transferred to Constitutional Recognition Reserve (122,085) (36,656) Balance at end of the year 1,735,862 1,586,702 23

24 Reserves Constitutional Recognition reserve 622, ,026 Total reserves 622, ,026 (a) Constitutional Recognition reserve Nature and purpose of reserve: The Constitutional Recognition reserve represents the proceeds of fundraising and will be specifically used to support the ongoing movement to recognise Aboriginal and Torres Strait Islander peoples in Australia s Constitution. Movements in reserve: Balance at beginning of the year 500, ,371 Transferred to reserve 122,085 36,656 Balance at end of year 622, , Key management personnel compensation Aggregate compensation to key management personnel and directors of the company 1,226,153 1,106,775 The directors of Reconciliation Australia are volunteers. They are not paid to perform their roles and responsibilities but are entitled to claim for reimbursement of lost wages due to time spent on Reconciliation Australia business. 24

25 15. Related parties (a) Subsidiaries The immediate parent of the group is Reconciliation Australia Limited. Australia Fund is the only controlled entity within the group. The Reconciliation Reconciliation Australia Limited acts as trustee for the Reconciliation Australia Fund and holds a 100% beneficial interest in the trust. The fund was established to enable the receipt of tax deductible donations from the public. There has been no change to the relationship between the company and the trust. Balances and transactions between the Company and its subsidiary, which is a related party, have been eliminated on consolidation and are not disclosed in this note. (b) Transactions with other related parties During the financial year ended 30 June 2017, the following transactions (ex. GST) occurred between the Company and its other related parties: Income of 6,800 (2016: 13,600) was received from the Australian Indigenous Governance Institute (AIGI) for the provision of accounting and payroll services. Mr J.C. Glanville, a director of the Company until 29 August 2016, is Chair of AIGI. Funding of 12,500 (2016: nil) was received from KPMG for attendance at the Recognise Gala Fundraising Dinner in December Mr P.S. Nash, a director of the Company was Chairman of KPMG during the year ended 30 June Funding of 41,000 (2016: nil) was received from Australia Unity for sponsorship of, and attendance at, the Recognise Gala Fundraising Dinner in December Ms M.A. Cilento, a director of the Company is a director of Australian Unity. A payment of 3,500 (2016: nil) was made to the Australian Indigenous Governance Institute (AIGI) for research services. Mr J.C. Glanville, a director of the Company until 29 August 2016 is Chair of AIGI. Payments totalling 300,000 (2016: 172,721) were made to the Australian Indigenous Governance Institute (AIGI) in relation to donations received from the Annamila Foundation (through the Australian Communities Foundation). Mr J.C. Glanville, a director of the Company until 29 August 2016, is Chair of AIGI. A payment of 5,852 (2016: 227) was made to the National Centre of Indigenous Excellence (NCIE) for venue hire and event costs. Ms K.M. Parker, a director of the Company was Chief Executive Officer of the NCIE during the year ended 30 June Payments totalling 45,600 (2016: 31,200) were made to Mr J.C. Glanville for consulting services provided to the Recognise Campaign. Mr Glanville was a director of the Company until 29 August A payment of 1,000 (2016: 6,500) was made to Mr K.R. Bedford for consulting services provided to the Recognise Campaign. Mr Bedford is a director of the Company. 25

26 Parent entity information The accounting policies of the parent entity are the same as those applied in the consolidated financial statements. Financial position Assets Current assets 8,184,945 12,690,009 Non current assets 120, ,078 Total assets 8,305,014 12,905,087 Liabilities Current liabilities 5,713,195 10,605,988 Non current liabilities 233, ,371 Total liabilities 5,947,041 10,818,359 Equity Reserves 1,735, ,026 Accumulated funds 622,111 1,586,702 Total equity 2,357,973 2,086,728 Financial performance Net surplus for the year 271, ,990 Other comprehensive income - - Total comprehensive income 271, ,990 Other parent entity information Guarantees entered into by the parent entity in relation to the debts of its subsidiary - - Contingent liabilities of the parent entity - - Commitments for the acquisition of property, plant and equipment by the parent entity

27 Note Operating lease arrangements Operating leases relate to office premises with lease terms of up to three years. Several of the leases include an option to extend for a further three years, with a market review clause in the event that the Company exercises the option to review. The Company does not have the option to purchase the leased asset at the expiry of the lease period. (a) Payments recognised as an expense Lease payments recognised as an expense 273, ,041 (b) Non cancellable operating lease commitments Not longer than 1 year 288, ,967 Longer than 1 year and not longer than 5 years 236,926 11,427 Longer than 5 years 100,741 - Total commitments under operating leases 626, , Additional company information Reconciliation Australia is a company limited by guarantee, incorporated and operating in Australia. If the Company is wound up, the constitution states that each member is required to contribute a maximum of 1 each towards meeting any outstanding obligations. As at 30 June 2017 the number of members was 9. The registered office and principal business address of Reconciliation Australia is: Old Parliament House King George Terrace Parkes ACT Subsequent events The subsequent events occurred after the balance date: Mr Justin Mohamed, Chief Executive Officer since November 2014 concluded his role with Reconciliation Australia on 28 July Ms Karen Mundine was appointed as the new Chief Executive Officer from 29 July Ms Mundine has been with the organisation since 2008, most recently as Deputy Chief Executive Officer. On 11 July 2017, the BHP Foundation announced that it would be entering into a five year, 11m grant agreement with Reconciliation Australia for the Narragunnawali and Indigenous Governance Programs. The grant agreement is due to commence in November

28 19. Subsequent events (continued) On 11 August 2017 it was announced that the Recognise campaign would be ceasing operations by 30 September 2017, due to the conclusion of Federal Government funding for this project. On 13 September 2017 The Myer Foundation requested that given the conclusion of the Recognise campaign on 30 September 2017, Reconciliation Australia should formally reapply to the Foundation to use the unspent portion of the funding the Foundation had provided for the Recognise regional field campaign. The balance of this unspent funding is included in the Revenue Received in Advance account and amounted to 445,605 at 30 June

29 Deloitte Touche Tohmatsu A.B.N Level 2 8 Brindabella Circuit Brindabella Business Park ACT 2609 GPO Box 823 Canberra ACT 2601 Australia DX 5661 Tel: +61 (0) Fax: +61 (0) Independent Auditor s Report to the members of Reconciliation Australia Limited Opinion We have audited the financial report of Reconciliation Australia Limited (the Entity ) and its subsidiary (the Group ) which comprises the consolidated statement of financial position as at 30 June 2017, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information, and the declaration by the directors as set out on pages 9 to 28. In our opinion, the accompanying financial report of the Group is in accordance with Division 60 of the Australian Charities and Not-for-profits Commission Act 2012 (the ACNC Act ), including: (i) giving a true and fair view of the Group s financial position as at 30 June 2017 and of their financial performance for the year then ended; and (ii) complying with Australian Accounting Standards Reduced Disclosure Regime and Division 60 of the Australian Charities and Not-for-profits Commission Regulation Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the ACNC Act and the ethical requirements of the Accounting Professional and Ethical Standards Board s APES 110 Code of Ethics for Professional Accountants (the Code ) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Other Information Directors are responsible for the other information. The other information comprises the information included in the Group s annual financial report for the year ended 30 June 2017, but does not include the financial report and our auditor s report thereon. Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Touche Tohmatsu Limited.

30 Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of Directors for the Financial Report The directors of the Entity are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards Reduced Disclosure Regime and the ACNC Act and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Auditor s Responsibilities for the Audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group s internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. Conclude on the appropriateness of the directors use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit